(AT Express) – London house prices rose at the slowest pace in more than three years last month, leading a cooling across the country.
The Royal Institution of Chartered Surveyors said its monthly index for the capital dropped to 9 in August from 11 in July. A U.K. gauge slid to 40 from 48, the lowest in a year.
RICS blamed the slowdown on tougher mortgage rules that took effect earlier this year and the prospect of higher interest rates. Property outside London is showing more resilience because in some areas, “the recovery has only recently taken hold and affordability is rather less stretched,” it said.
The survey chimes with other reports indicating property demand and price growth is cooling in London. Hometrack Ltd. said that values in the capital stalled in August and there was “evidence of growing resistance” to high asking prices.
“The London market is gradually moving onto a more sustainable footing,” said Simon Rubinsohn, chief economist at RICS in London. “A modest increase in the number of instructions” is “slowly helping to create a better balance with demand and taking the edge off price gains,” he said.
In its analysis, RICS said “increased rhetoric” from policy makers on housing risks may also have lowered buyer confidence. Sales expectations have moderated and the number agreed deals dipped for the first time in two years last month. A measure of surveyors’ outlook for prices dropped to the lowest since March 2013.